Turkey: is confidence enough?

A bet on the stock market is a bet politics will not get in the way

Spanish banks: home alone

Overseas banks are getting out of Spain, leaving domestic lenders to consolidate

Bidvest: make it simple

A split up of the South African conglomerate would create value

REC Solar: reflected glory

Norwegian group is the beneficiary of a US-China trade spat

Hong Kong: painful reality

Special status as commercial gateway to China is on decline

Margins: the new normal

Bears have been waiting for profit margins to revert

US banking: too small to fail

Small US banks are punching above their weight

Russia: faute de mieux

You don’t have to own an oil company to invest in Russia

Tesco: it really is that bad

Retailer’s shares are not cheap yet

Media M&A: digital divide

Media legends are missing out on transition to digital video

  • Priced to please

    Everyone likes to feel a little warm and fuzzy on the first day of a public listing. That’s why IPOs are traditionally priced slightly below demand, guaranteeing a nice first-day “pop”. But a look at first-day price changes shows something surprising: the first day pop has actually fallen over the past 20 years:

    Some companies want the good publicity of a rising share price. But as Lex has pointed out this also means companies are losing out on potential fundraising. Over the past decade, the total positive change in companies’ market cap during their first day of listing was $27.7bn. The total negative change (for companies whose share price fell on their first day) was just -$1.5bn, according to data compiled from Capital IQ. That’s more than $26bn in net lost proceeds to the companies. Not exactly a reason to pop open the champagne.

    Continue reading: Priced to please
  • Cisco subtraction

    So Cisco is laying off 6,000 people. But will headcount actually go down? Cisco says no: The layoffs won’t cause a net reduction in jobs because it will still be hiring people. Forecasts about workforce changes are rarely accurate, anyway — as a glance at the past few years shows. Here’s a chart of what Cisco said would happen in its August earnings calls each year, versus what actually happened:

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  • Unclogging the pipes at Kinder Morgan

    Last week, we pointed out one of the most exquisite slides we had seen all year in an investor presentation. Simply by spinning off its copper and fiber assets into a REIT, the telecom company Windstream believed its stock would rocket by 73 per cent. Alas, it is only up 7 per cent since then.

    On Monday, Kinder Morgan, remarkably, came up with the mirror image set of slides. Kinder would consolidate its empire of natural gas pipelines by dissolving its tax-advantaged master limited partnership (MLPs are analogous to its REITs in that they don’t pay corporate level tax). It would also consolidate all companies into a regular old corporate tax-paying C-corporation.

    Continue reading: Unclogging the pipes at Kinder Morgan
  • Big game hunters

    Big, high profile M&A deals get the fattest headlines and fattest fees. But are there enough of them to sustain an M&A advice business?

    Here are two slides from a recent investor presentation from Greenhill & Co., a publicly-traded boutique investment bank, on the topic (click to enlarge):

    Continue reading: Big game hunters